Intel - ligence

Hands up if your Smartphone battery needs charging twice a day? According to news from Intel last week, new 3D chips are “production ready” and promise to drain less power leading to longer battery life in mobile devices. Hooray. The FT’s Lex leads with a piece on Intel (NASDAQ:INTC) pointing out that investors are not convinced this is a silver bullet in such a competitive low margin market. Short sellers are active in this area as can be seen from the peer comparison using the Bloomberg RV function. The biggest short in the sector are Aixtron AG (ETR:AIXA), Microchip Technology (NASDAQ:MCHP), Cree (NASDAQ:CREE), Teradyne Inc (NYSE:TER) and Elpida Memory (TYO:6665) and most of those saw a weekly increase in their shares on loan.

Message

Intel’s result led to a surge in the share price. As can be seen above, this price momentum was a short selling opportunity for some with a 44% increase in the shares on loan over a week. Intel’s short interest remains under the global peer average as you can see from the RV chart below at 0.85%. Arm Holdings needs a mention since it is the dominant force in this area. Short sellers remain on the sidelines having given up shorting this name with 1.45% of its shares on loan and days to cover only 0.65.
 

Sentiment dashboard

The weekly change in overall investor sentiment for US semi conductor companies is positive. Funds who lend have been increasing their holdings with short sellers closing their positions in three times as many names, as is the reverse (and negative situation). As you can see from our Excel Dashboard there is particularly positive sentiment towards Nvidia, Semtech, Advanced Micro Devices and Arm’s ADR. The negative list features Aixtron, Energy Conversion Devices and Spredtrum Communications.

Bottom Line

Aixtron stands out. Its share price has been ebbing lower of late and both the ordinary share and the ADR are showing very high short interest.